I’ve seriously considered selling my current “dream” home that has a mortgage because the equity is enough to buy a smaller home for cash. But my reasoning has led me to believe that I won’t get thrown out of my house during a pandemic. The Sherriff will have bigger fish to fry (if he’s alive) than to serve papers on me.
Further, houses after the pandemic will be at best worth however many percent of the population survives. If 5% of population lives the house will be worth 5% of what is was worth pre pandemic (if it has any value at all).
I sometimes wonder if anyone will “own” any real estate, or if it will revert back to squaters rights. Very difficult to envision how it might play out.
I think if 5% of the population survives (that’s being optimistic), the survivors will somehow make their way to areas of the country with ample hydro power resources and restart civilzation. Cities with no hydro resources will simply be completely abandoned. Say, for example, NYC is completely abandoned. Eventually, 50 or 100 years from now, it will be reinhabited. Who will own what? Squatters rights?
If there is a high CFR rate, I can see the tax credit now. Have a child, get a house.
Blue Ridge Mountain Mom - That sounds good for young people having kids but what about us older (more mature) folks? Do you think that plan would also cover adoption?
I’m quite sure that adopting orphans would fall in with that tax credit. Of course, that is supposing that the politicians have more sense then than they do now. What are the odds of all of the stupid politicians being taken out by the bird flu? Are we really that lucky?
The message will be from any central authority—Stay where you are, produce something, anything of value, and we will sort it all out later, much, much later.
It will be the longest “bank holiday” the world has ever seen (except maybe when the Roman Empire crumbled).
If we don’t have to worry about the banks, I doubt we’ll have to worry about other creditors either. Let’s face it, when you’re struggling to survive, you really aren’t going to be obsessed with your credit rating.
Way more than 5% will survive. (IMHO) Even if 50% of the human race is wiped out, we will still have plenty of people. I must admit…While sitting in traffic on a major interstate (with nothing else to do) I imagined that every second car that I could see for miles in both directions simply vanished. From where I was sitting, I didn’t think it would have made much difference. There were still way to many cars. So then I imagined if every household in my community lost a member…then if every other house lost 1 out of three members….then if all of the schools lost 50% of the children…you know there are still plenty of people left. Remember, we had this happen before. Not very long ago. I know people who were there. Thinking about all this now before it happens is a lot more frightening than actually being in the reality of it it seems. I think imaginations can intensify reality and blow it out of proportion. The two people that I know that have first hand experience with this horror say it was a terrible experience, but it was not as bad as our imaginations can make it. People got sick.. sickness like they have never experienced before or since. People died. Whole families in one home. Sometimes just the parents. That left children for the neighbors to care for. But, in these two families, not one member get sick. And of the people who got sick, not very many died. Most recovered fully. They know, because it was their family members that worked hard caring for the sick. They say then the ones that recovered would then take care of the sick and the children of the sick. Remember back then they did not have disposable diapers, elctric washers and dryers, microwaves, ect…taking care of a sick family with children was a huge job. But they did it. I think it is amazing what a human can suffer and get through, when they have too. When I say How did you manage that without going to peices. They bot say, we had to. There was to much to do to feel sorry or worry. It had to be done. People were not lazy. They had to be strong and work hard to make it. People helped each other in those days. They say a lot more people would have died if they were afraid to help each other. But when one family would recover with a neihbors help, they would help the next survive. They never thought they could avoid the sickness by not helping their neighbors. They knew that some would get sick and some would not, no matter what. They just worked hard to help as many of the sick survive as they could. I think enough people will survive that real estate ownership will not be a big issue.
The laws and records of real estate ownership go back to the beginning of our country and that won’t change. I used to perform title searches on real estate for conveyances, sometimes back to the time the government deeded the property to the original owners. What happens to the real estate depends on how you have it titled or willed. If you don’t pay your taxes, somebody else will and they may end up owning the property, after paying any outstanding mortgage. Those who default on their mortgage will eventually be foreclosed on and the bank will own the property, then they will sell it.
Don’t count on “squatter’s rights” or acquiring property by “adverse possession” http://tinyurl.com/y4gp6c, in my state it takes 21 years. oh, and you can never acquire title to land by adverse possession against the government.
Don’t count on being able to stay in your home if you default on the mortgage or don’t pay your taxes. It may take time for them to get around to foreclosing, but by then you’ll be in so deep, you’ll never get out and risk losing any equity you have. Will the government step in to prevent it? I don’t know, but I certainly wouldn’t count on it. Don’t forget, over history, mortgage lenders have been seen as predators.
I do have a mortgage on my house and have substantial equity, but know that I could lose it all. We do have substantial life insurance if one of us doesn’t make it through this, which would cover the mortgage, and also have retirement savings/pension we could use (if it’s still there). This is a substantial concern for me, with two young children.
(life insurance that would be honored during a pandemic?? wow!)
I do think these, “What about rents and taxes and mortgages?” conversations need to be happening publically now.
Not during or after pandemic. (Politicians aren’t hearing from enough people with “pandemic influenza year” on their radars.)
tjclaw1 - Thanks for being the voice of reason and pointing out the facts on this issue that keeps coming up. While some may like the idea of aquatters rights allowing them to suddenly own a palace…it just ain’t gonna happen folks. People will have either protected their property so that their legal heirs who survive them will receive it or it’s ownership will revert back to the mortgage lender. Both parties, once they have the documentation proving legal ownership, will have any squatters removed from the property, by the police if necessary.
Those who own peoperty or are purchasing property should do whatever they can to protect it so that their heirs receive it and not some lending company. Now is the time to look over their paperwork and insurance to review what protections are in place for those heirs.
Jumping Jack Flash - Dream homes are great but I am all for owning one’s home outright whenever possible. Look at what you currently owe and how it is financed. Is there a way you can increase your payments or utilize other investments to pay your home off early? How important is this “dream” home to you? Could you find a home you could purchase outright and actually enjoy living in for the emount of equity in your dream home or would it just be a house to you? How long will it take to sell this dream home and purchase another house? After all the housing market has slowed considerably lately. Is it feasable to even try to sell your current home at this time?
Opps! aquatters should be squatters
One of my family members works for largest mobile home financer in US, they gave everyone involved in Katrina “time off” from payments in order for owners to get back on their feet. I imagine most mortgage companies will do something along these lines during pandemic. BIG warning, don’t get behind on your payments prior to pandemic. Mortgage companies are always willing to help you if you have been a regular payer (a payment every month, not late with payment etc.). People who lose their homes to foreclosure usually are at least 3 months behind, have not tried to make any payments and are usually those that are slow to pay amyway, this really “ticks off” the mortgage company. Best advice, try to make some sort of payment, provided we have mail service (no mail service, how can we make payments,) mortgage companies will have to take that into consideration too. These companies will be more than glad to find someone alive in one of their mortgaged homes, they will try their best to get us back on track.
I’m glad that someone has brought this up. It is one of my biggest dilemmas, water being number one. I am a broker (not very active, though) and the question is not any easier. We debate selling and moving far out, with out any mortgage, or downsizing to a smaller place nearby, with a smaller mortgage. Out of town property, to us, means no work, no support system, take my kids from their friends and really good school…what if it is 3–5 years before it happens? Not a good choice. Downsizing would keep the kids near their friends and school, and still have work for us, and our support system of friends and family, but .25 acre vs. 1 acre(now), but would still have to have a mortgage, and too close to too many people IF there are marauding crowds. Not necessarily the best choice, either. No easy answers…too many variables.
As far as who owns what, even if the cfr is 50%, that just takes us back to population levels 50 years ago, plenty of people.
Knowing banks, there might be a temporary respite from the government, but i would bet the banks already have systems in place to lay claim to the property. I’m not holding my breath that I will own anything. Another problem would be even if you do own your property outright, and no one harms you or your property, who will pay for the devastion after. So many places already have property taxes that are unbearable, especially for seniors and those on limited incomes, and then factor this in. They will have to raise taxes somewhere…would you be able to afford it(and would you even have any money…collapse of the dollar, money disappeared from banks, 401k gone,etc). Pretty depressing trying to work thru any contingencies. I’m just taking one day at a time, but I know I have to start working thru some of this soon.
tjclaw1, I couldn’t agree more. Far from some agrarian freeland developing, I think we can just look to recent history to see what happens after social turmoil. There are always crafty people who move in and make sure property ends up in the hands of them and theirs. I am not such a student of American history but I believe after the Civil War, the farms of displaced people — sometimes farms that had been in the family for generations — were purchased for dollars’ worth of back taxes and posessed by connected members of the local “governments”. And more recently, in Romania IIRC after the collapse of the Soviet Union, oligarchs snapped up enormous national assets: oil companies, mines, machine production for mere millions rather than the billions they were worth. Now aging middle-managers pull plows with ropes on the tiny plots of land they lease. Millions were supposed to have starved.
That’s what happens to the little people, folks.
First step should be to review your mortgage terms. Yes, mortgage lenders are more likely to work with you if you are not already behind and make a “good faith” effort to pay. Maybe the government will step in, but don’t count on it. We refinanced our mortgage a few years ago, make higher payments than required, and although we have only lived here 7 years, we’ve got our mortgage down from 30 years to 70 years. Checked my lender’s web site and looks like they’ll really try to work with you if you are experiencing a temporary hardship. Also checked on number of properties they own and in my state it is 58 - I assume foreclosed homes.
Don’t forget, you may be able to file for bankruptcy post-pandemic and possibly be able to save your home plus some of the equity. Here are a couple of scenarios:
You were not able to work during pandemic and post-pandemic you have a job but is is much lower salary so you can’t afford to pay all of your pre-pandemic credit cards, mounting medical bills, plus mortgage. You may be able to have unsecured debt discharged in bankruptcy (Chapter 7) ( but not student loans), reaffirm your car debt, and refinance your mortgage. Depending on how much equity you have post-pandemic, you may be required to pay some of the unsecured debt.
Secend scenario, you have too much equity in your house and would have to sell it to pay all creditors, you may be able to file a Chapter 13 to work out payment plans with your creditors and prevent foreclosure.
Bottom line is I would do my best to avoid being in this position, but if you’re not in a position to move or pay off your mortgage, if you get in trouble 1) immediately contact your mortgage lender to work something out; 2) if that doesn’t work, immediately contact an attorney before foreclosure begins. Third, take a deep breath, there are options and people who are aware of their rights and options will likely keep their homes. Here’s some info on bankruptcy law:
http://tinyurl.com/yl4r29 Hopefully this will help you sleep at night.
When I was in private practice, the majority of Chapter 7 bankruptcies I handled were people who had some major medical problem with no insurance, got divorced, or had bills mount up while unemployed - through no fault of their own. It does happen. Once they were employed and had insurance, it was time to file bankruptcy because they would never in a million years be able to pay all the debt. Most people kept their houses and cars and re-established their credit. Now I haven’t done any bankruptcy work since the new laws became effective, but from what I understand, it hasn’t stopped people from getting relief in bankruptcy.
Oh, and I’d recommend you keep some cash on hand as no bankruptcy lawyer I know will even start a bankruptcy proceeding without being paid first.
Oops, that should have read down from 30 years to 17 years….time for more coffee!